BRICS Under Attack (3)

Western Banks, Governments Launch Full-Spectrum Assault On Russia (Part I)

by Eric Draitser

Mint Press News (April 20 2016)

This article is part of a series on Western meddling to foment unrest and destabilize BRICS nations in an effort to ensure the continuation of Western economic and political control over the Global South. The first two parts, focused on Brazil and South Africa. Up next: Part II on the assault on Russia, which focuses on the political, psychological and military aspects that run in tandem with the economic war on Moscow.

The US-Nato Empire, with its centers of power in Washington, on Wall Street, and in the city of London, is on the offensive against the BRICS countries. This assault takes many forms, each tailored to its specific target.

The ongoing soft coup in Brazil has recently entered a new stage with the impeachment of President Dilma Rousseff of the left-wing Workers’ Party. Simultaneously, the destabilization of the ANC-led government in South Africa continues as political forces align to remove President Jacob Zuma. These two situations illustrate clearly the very potent forms of subversion via Western-funded political formations and movements being employed against Brazil, Russia, India, China and South Africa, the bloc of emerging economies also known as BRICS.

However, when it comes to a country as large as Russia, with its vast military capabilities, consolidated and wildly popular political leadership, and growing antagonism toward the West, the tools available to the Empire to undermine and destabilize are in some ways more limited.

Indeed, in the context of Russia, the popular mobilization pretext does not apply, and so that weapon in the imperial arsenal is blunted considerably. But there are other, equally potent (and equally dangerous) methods to achieve the desired effect.

Russia is the target of a multi-faceted, asymmetric campaign of destabilization that has employed economic, political, and psychological forms of warfare, each of which has been specifically designed to inflict maximum damage on the Kremlin. While the results of this multi-pronged assault have been mixed, and their ultimate effect being the subject of much debate, Moscow is, without a doubt, ground zero in a global assault against the BRICS nations.

Economic War: Hitting RussiaWwhere it’s Vulnerable

While Russia is a world class power militarily, it is highly vulnerable economically. For that obvious reason, this area has been a primary focus of the destabilization thrust.

Russia has for decades been overly reliant, if not entirely dependent, on revenues from the energy sector to maintain its economic growth and fund its budget. According to the US Energy Information Administration and Russia’s Federal Customs Service, oil and gas sales accounted for 68 percent of Russia’s total export revenues in 2013. With more than two-thirds of total export revenues and roughly fifty percent of the federal budget, not to mention 25 percent of total GDP, coming from oil and gas revenue, Russia’s very economic survival has been as dependent on energy as almost any country in the world.

In light of this, it’s no surprise that the drop in oil prices over the eighteen-month period from April 2014 to January 2016, which saw prices dive from $105 per barrel to under $30 per barrel, has caused tremendous economic instability in Russia. Even many leading Russian officials have conceded that the negative impact to Russia’s economy is substantial, to say the least.

At the World Economic Forum in January, former Russian Finance Minister Alexey Kudrin explained that not only has the drop in oil prices badly hurt the Russian economy, but the worst may be yet to come. Kudrin noted the potential for prices to drop even further, possibly even below $20 per barrel, and he warned that the impact to the economy will be significant.

Specifically, it’s not just the loss of revenue, but the negative effect on wages and the currency which have many economic analysts and political figures worried.

According to the Russian Federal Statistics Service, real wages for Russian workers have dropped significantly since the end of 2014, with steep declines throughout 2015 continuing into early 2016. This has been felt by ordinary Russians, whose wages have stagnated while inflation causes prices to shoot upwards and who have had to endure belt-tightening in terms of personal consumption, and at the national level, where the Russian government has been facing a potentially large budget shortfall for 2016.

It must be noted, however, that recent months have seen an improvement in the relative performance of the ruble, but the long-term outlook from experts remains gloomy.

This has led many Russian analysts and policymakers to advocate yet again for a decreased dependence on energy revenues. They argue that the current climate could force economic restructuring away from the critical energy sector. Aside from Kudrin, Deputy Prime Minister Yuri Trutnev made the case for potential “structural economic reforms”, as did Vladimir Mau of the Russian Presidential Academy of National Economy and Public Administration.

Writing earlier this year in Vedomosti, Russia’s leading business publication, Mau explained:


The demand for oil as a commodity depends on technological progress … And it’s not obvious that oil as a fuel will be always in demand in times of economic growth. With the change of the technological model, it is not ruled out that oil will become just a stock commodity for the energy and chemical industry.


This last point – how oil is used relative to the market – is the most salient; in other words, it’s the financialization of oil. But the analysis must go a step further and explore how the financialization is, in effect, a weaponization process as oil prices become increasingly the playthings of powerful financial institutions, particularly the major banks on Wall Street and in the city of London. And this is no mere conspiracy theory.

How Wall Street Targeted Russia Using Oil

In July 2013, Senator Sherrod Brown, chair of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, opened a hearing to probe just how connected major Wall Street banks were to the holding of physical oil assets, and the attendant ability of these companies to manipulate oil prices. The findings of the hearing, considered damning by multiple analysts knowledgeable on the subject, prompted an investigation by the Senate’s Permanent Subcommittee on Investigations, published as “Wall Street Bank Involvement with Physical Commodities”.

The report highlighted just one of the big banks, Morgan Stanley, noting:


One of Morgan Stanley’s primary physical oil activities was to store vast quantities of oil in facilities located within the United States and abroad. According to Morgan Stanley, in the New York-New Jersey-Connecticut area alone, by 2011, it had leases on oil storage facilities with a total capacity of 8.2 million barrels, increasing to 9.1 million barrels in 2012, and then decreasing to 7.7 million barrels in 2013. Morgan Stanley also had storage facilities in Europe and Asia.  According to the Federal Reserve, by 2012, Morgan Stanley held “operating leases on over 100 oil storage tank fields with 58 million barrels of storage capacity globally”.


Pam and Russ Martens of the well-respected financial analysis site succinctly noted in their analysis of this issue: “With financial derivatives and 58 million barrels of physical storage capacity, it might not be so hard to manipulate the oil market”.

Indeed, the sheer scope of Morgan Stanley’s market influence demonstrates the obvious fact that the major Wall Street banks, and their cousins in the city of London, are able to significantly affect global prices using multiple levers like supply and derivatives, among others.

The Senate report’s brazen honesty is likely the main reason the corporate media failed to cover it all.  As noted in the report:


Due to their physical commodity activities, Goldman, JPMorgan, and Morgan Stanley incurred increased financial, operational, and catastrophic event risks, faced accusations of unfair trading advantages, conflicts of interest, and market manipulation, and intensified problems with being too big to manage or regulate, introducing new systemic risks into the US financial system.


But perhaps most jaw-dropping is this January 2014 statement by Norman Bay, director of the Office of Enforcement at the Federal Energy Regulatory Commission, who testified before the Committee on Banking and Financial Institutions and Consumer Protection Subcommittee. He plainly outlined how the big banks manipulate global oil markets:


A fundamental point necessary to understanding many of our manipulation cases is that financial and physical energy markets are interrelated … a manipulator can use physical trades (or other energy transactions that affect physical prices) to move prices in a way that benefits his overall financial position. One useful way of looking at manipulation is that the physical transaction is a “tool” that is used to “target” a physical price.


When one considers how much influence these large banks have on global prices, it’s almost self-evident that they would be able to use oil prices to execute a political and geopolitical agenda. With that in mind, it seems highly suspicious (to say the least) that the collapse of the oil price coincided directly with Russia’s move to annex Crimea and assert its dominance over its sphere of influence, thereby effectively stopping the eastward expansion of Nato in Ukraine.

It’s amusing then when one reads The New York Times reporting this month that “simple economics” explains the drop in oil prices. In fact, it’s clear that it’s just the opposite: The collapse of oil is the result of financial manipulation by Wall Street in the service of the broader agenda of the Empire.

Indeed, in late 2014 Russian President Vladimir Putin implied strongly that the oil plunge had less to do with economic factors than with political decisions. Putin openly theorized:



There’s lots of talk about what’s causing (the lowering of the oil price). Could it be the agreement between the US and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could.


Of course, Putin was not alone in this assessment, as many international observers spread “conspiracy theories” about collusion between the US and Saudi Arabia to deliberately depress oil prices by not cutting production despite all market indicators pointing to a needed decrease.

With US-Russia relations having reached their nadir at precisely that moment, and with Venezuela and Iran also on the enemies list, it is no surprise that many analysts around the world concluded that Washington and Riyadh were conspiring on oil for political reasons.

Of course, the other major impact of the oil plunge on Russia has to do with the burgeoning energy-trade relationship between Russia and China. After the massive oil and gas deals announced between Russia and China in 2014 – deals worth hundreds of billions of dollars over the next three decades, it seems that Washington calculated that while it could not prevent the deals from moving forward, it could undermine them by fundamentally changing the calculus of the deals by tanking oil prices. In so doing, not only have the contracts been rendered less profitable for Russia, they are now subject to decreasing demand from China, which is experiencing its own economic slowdown.

In short, Russia’s attempt to break free of its dependence on revenue from gas sales to Europe by shifting its focus eastward has left Moscow in a bind. Facing the prospect of significantly less revenue than it anticipated coming from the deals with Beijing, Russia has been forced to adjust its own estimates and outlook for the coming years.

Sanctions: The Other Economic Weapon

The overall impact of Western sanctions against Russia is a hotly debated subject. Russian media tends to downplay the overall impact of the sanctions, while the Western media paints a picture of imminent collapse. Notably, Paul Krugman, the leading liberal doomsayer, prognosticated in The New York Times in 2014 that “Putin’s Bubble Bursts”, warning that Russia was headed for economic meltdown thanks to the courageous sanctions regime imposed by the fearless leader President Barack Obama.

In reality, the sanctions had little immediate, direct impact on the Russian economy, but the indirect bruising might be significant, particularly over the medium- and long-term. Last year, the International Monetary Fund issued a report, noting:


IMF estimates suggest that sanctions and counter sanctions might have initially reduced real GDP by one to 1.5 percent. Prolonged sanctions may compound already declining productivity growth. The cumulative output loss could amount to nine percent of GDP over the medium term. However, the report’s authors underline that these model-driven results are subject to significant uncertainty.


But, looking beyond the raw numbers, one must realize that the policy prescriptions outlined by the IMF and leading economists internationally are perhaps the actual target for the West.

The IMF recommended “reforming the pension system” (read: reduce pensions), reducing energy subsidies, reducing tax exemptions, and other measures, while also suggesting that education, health care, and public investment be safeguarded. However, the subtext of the recommendations is that austerity, which by its very definition starves public programs of much needed funding, is the way to go for Russia.

There are likely strategic planners in Washington who recognize that the political subversion model employed in Brazil and South Africa simply won’t work in Russia. If nothing else, the failed “White Revolution” protests of late 2011 led by Russian liberals and various pro-Western political forces, demonstrated unequivocally that the Russian state was prepared to prevent precisely this sort of outcome.

And so it seems that those who play on what former National Security Advisor Zbigniew Brzezinski famously called “The Grand Chessboard”, have made their moves in an attempt to corner Russia economically. Whether that strategy has been, or will be, effective likely depends on perspective. While it alone will not bring about the Western pipe dream of regime change in Russia, the Empire’s elites are banking on the collective assault on Russia and the BRICS broadly to do what political subversion alone could not.

Links: The original version of this article, at the URL below, contains links to further information not included here.

Eric Draitser is a geopolitical analyst based in New York and the founder of StopImperialism.

Copyright (c) 2012 MintPress. All rights reserved.

Categories: Uncategorized

BRICS Under Attack (2)

The Empire’s Destabilizing Hand Reaches Into South Africa

by Eric Draitser

Mint Press News (March 28 2016)

This article is part of a series on Western meddling to foment unrest and destabilize BRICS nations in an effort to ensure the continuation of Western economic and political control over the Global South. The first part focused on Brazil. Still to come: BRICS under attack in Russia, India, and China.

Major protests have gripped South Africa in recent months as political forces have emerged to give voice to a growing discontent with the government and ruling party. Beneath the surface of these demonstrations organized around legitimate grievances, however, there’s an undercurrent of political manipulation.

South Africa and its ruling African National Congress (“ANC”) party have been targeted for destabilization due to the country’s burgeoning relationship with China and other non-Western nations, most obviously typified by South Africa’s inclusion in BRICS, the association of the five major emerging economies of Brazil, Russia, India, China and South Africa.

Last year, for example, China surpassed the United States and European Union as South Africa’s largest trade partner, and the ANC has been hard at work promoting further trade cooperation. Answering questions in the National Assembly, Deputy President Cyril Ramaphosa explained: “We trade more effectively with China because the relationship is based on win-win; mutual benefit that they can get out of the relationship and that we can get out the relationship”.

But recent protests against the ANC government have threatened the ruling tripartite coalition of the ANC, along with the South African Communist Party and Congress of South African Trade Unions.

A number of groups on the left such as the Economic Freedom Fighters, led by former ANC youth leader Julius Malema, and the National Union of Metalworkers, have taken part in the protests touched off by student demonstrations against university fees.

At the same time, however, Western-backed opposition forces led by the Democratic Alliance (“DA”) have positioned themselves as leaders and beneficiaries of the anti-government movement.

The DA, a center-right liberal political party now fronted by “South Africa’s Obama”, Mmusi Maimane, is lauded by Western financial interests. The American Chamber of Commerce, for example, has consistently heaped praise on DA as the way forward for South Africa.

When Maimane delivered a widely publicized speech at a May 2015 business breakfast hosted by the American Chamber of Commerce, he stated:


While China may have overtaken the US as South Africa’s largest trade partner in volume, the US remains an incredibly important partner for our future growth and development.

I refer to “future growth and development” for under the lacklustre and confused leadership of the ANC, our economy has failed to reach its true potential.


A careful reading of the subtext offers a clearer understanding of what Maimane is implying. By noting that China has overtaken the US as South Africa’s largest trade partner, he is directly tying the ANC and its “lackluster and confused leadership” to the close relationship with China.

In other words, the DA represents “the future” – that is, a future in which the US is able to reclaim its status as South Africa’s dominant trade partner. This certainly would not have been lost on the attendees at a Chamber of Commerce breakfast. (It should be recalled that the Chamber of Commerce is traditionally seen as the main arm of US economic power projection in the Global South – just ask any leader in South and Central America.)

The Wall Street-London Connection Runs Deep

But the ties to the political and financial establishment of neoliberal capital and the US empire do not stop at the American Chamber of Commerce. In 2014 it came to light that one of the principal financiers behind the DA and its short-lived attempt at unity with the centrist Agang SA party, led by anti-Apartheid figure Mamphela Ramphele, was billionaire Nathan Kirsh.

As the Business Times noted in March 2014:


Mr Kirsh said he provided a “marginal amount” of funding to both the DA and Agang SA … but denied bringing the parties together.

“I believe there’s got to be an opposition to the government, but I wasn’t involved in the marriage … When Mamphela [Ramphele] came to me, she represented what could be good, credible opposition and I gave her some money. When [leader of the DA] Helen Zille came to me, she had already shown her ability to put things together and the [Western] Cape runs perhaps better than any of the other provinces”, said Kirsh.

Zille and Ramphele announced early in February that the short-lived plan to join forces, and for Ramphele to stand as the DA’s presidential candidate, was over.

At the time, Ms Ramphele was quoted as saying “a donor pushed the DA and Agang SA together”.


Kirsh, the business tycoon who heads a multinational business empire controlled through his Kirsh Holdings Group, is one of the richest men in the world, having made his fortune during the Apartheid regime in South Africa and in a variety of other ventures since then.

Aside from his dodgy past, Kirsh is well known to have untold billions in assets and companies domiciled in tax havens from the British Virgin Islands to Liberia. Perhaps most notorious among his recent money-making projects has been the massive contracts awarded to his company Magal Security Systems by the Israeli government to provide electronic fences and security systems for the apartheid wall Israel constructed, and which has been almost universally condemned as illegal.

In fact, Kirsh is well known as being very close to some of the leading institutions of Western finance capital, as evidenced by his choice of Bradley Fried to oversee Kirsh Group. As noted by Bloomberg, Fried will oversee “the management company that holds Kirsh’s disparate assets, which include two US wholesale grocery businesses, commercial and residential real estate, and private equity investments on four continents”. Fried is a member of the Bank of England’s Court of Directors and a well-connected executive in circles of high finance.

Fried “takes over [Kirsh Group] from Ron Sandler, the former CEO of Lloyd’s of London who Kirsh said will remain working as a trustee and adviser to the family”. It should be noted that Sandler, who served as chairman of the infamous Northern Rock, had close ties with former British Prime Minister Gordon Brown, himself a creature of the City of London.

Between Kirsh’s connections to the highest circles of finance capital in the US empire, and his lucrative business dealings with Apartheid South Africa and the current apartheid state of Israel, it should be crystal clear that Kirsh is no progressive. So what’s he doing financing the allegedly “liberal-progressive” opposition in South Africa? To put it simply, Kirsh is making yet another investment that he hopes will pay massive political and financial dividends.

Soft Power Projects from Pro-DA Think Tanks

Another source of soft power projection from the US empire are the think tanks that uphold the neoliberal DA as the future for South Africa. One example is Legatum Institute, which has published numerous papers criticizing the ANC and calling for “democratization” and “plurality of voices” in the political sphere.

In an innocuously titled 2014 report, “South Africa and the Pursuit of Inclusive Growth”, Legatum noted:


Together opposition voters constituted just over 34 percent of the national vote. The ANC is understandably proud of its achievements in attracting such a large proportion of votes. However, the weakness of the opposition has reduced the pressure on the ANC to win electoral votes on the basis of its performance in government. It also means that at the national level the ANC’s commitment to democracy has not been put to the ultimate test: the transfer of power to a victorious opposition.


While the report notes the democratic nature of South Africa’s election, the implied argument, couched in the typically duplicitous rhetoric of Western think tanks, is that the ANC should be unseated from power in order for a truly democratic South Africa to emerge. The report, it should be noted, was edited and overseen by the notoriously anti-Russia, anti-China, anti-BRICS, neoliberal Anne Applebaum, who has repeatedly used her pen and face in the service of the empire’s agenda. (Interesting to note also is that Applebaum is married to Radek Sikorski, the vehemently pro-Nato former foreign minister of Poland.)

One example of Applebaum’s anti-Russia outlook is her widely read 2014 essay in the New York Review of Books, “How He [Putin] and His Cronies Stole Russia”, which argued the typical neoliberal finance capital line that Russia was on the right path in the 1990s under the stewardship of the US- and Wall Street-backed Russian President Boris Yeltsin and his gaggle of thieves, but that Putin and his “kleptocratic KGB apparatchiks” seized control of Russia for their own purposes.

Such nonsense, in addition to Applebaum’s unmitigated warmongering in matters relating to Syria and Libya, demonstrates just what sort of slant exists in her report on South Africa.

Another important element in this equation is an understanding of exactly what the Legatum Institute really is and who funds it. As Pando’s Mark Ames wrote in 2015:



Legatum turns out to be a project of the most secretive billionaire vulture capital investor you’ve (and I’d) never heard of: Christopher Chandler, a New Zealander who, along with his billionaire brother Richard Chandler, ran one of the world’s most successful vulture capital funds  …

Brother Christopher Chandler took his billions to Dubai, where he launched Legatum Capital, and, in 2007, the Legatum Institute  …  The Legatum Institute’s motto, displayed proudly on its homepage, reads “Prosperity Through Revitalising Capitalism and Democracy”.

…  [T]he Chandler brothers were the largest foreign portfolio investors in Russia throughout the 1990s into the first half of the 2000s, including the largest foreign investors in natural gas behemoth Gazprom.  …

From what I’ve learned, the Chandlers make buckets of fast money by buying into totally depressed and corrupt emerging markets when everyone else is too afraid to, driving up the price of their assets by making a lot of noise about corporate governance and corruption, and then selling out when those investments tick up during what look like to outsiders as principled battles over corporate governance issues. In other words, a form of extreme green-mailing.



Applebaum’s official title with Legatum is “director of the Transitions Forum”, “a series of projects that examine the challenges and opportunities of radical political and economic change”. No wonder the think tank’s prized propagandist is so gung-ho in her hatred of all things Putin and Russia: Her bosses were directly targeted by Putin and the Russian government as it sought to reverse the “vulturization” of Russia’s economy carried out by Western capitalists like the Chandlers.

It seems then that Legatum is part of the same anti-Russian, anti-BRICS network of Western NGOs and think tanks that includes the International Republican Institute, Freedom House, the National Democratic Institute, and the National Endowment for Democracy.  And it should come as no surprise that Russia and many other countries have moved so strongly to curtail their presence and influence in their respective countries (this author has written detailed analyses of the political significance of the NGO laws in Russia and China).

Powerful Forces Aligning

Make no mistake, though: Institutional issues such as corruption and political and economic disenfranchisement do indeed exist in South Africa, and these must be addressed. The challenge against the ANC from leftist forces who seek wealth and land redistribution, socialization of the economy, and other traditional policies associated with leftist politics is to be welcomed. That challenge could likely push the ANC to make much needed policy changes, including moving further away from neoliberal capitalism, as it broadens its engagement with the non-Western world.

However, one should not miss the forest for the trees. There are powerful forces aligning behind the DA and other Western proxy political forces in order to destabilize a key partner of the BRICS project.

Links: The original version of this article, at the URL below, contains links to further information not included here.


Eric Draitser is a geopolitical analyst based in New York and the founder of StopImperialism.

Copyright (c) 2012 MintPress. All rights reserved.

BRICS Under Attack: The Empire’s Destabilizing Hand Reaches Into South Africa

Categories: Uncategorized

BRICS Under Attack (1)

The Empire Strikes Back In Brazil

by Eric Draitser

Mint Press News (March 22 2016)

The last decade has seen a remarkable coalescing of non-Western nations in both economic and political partnerships. These multilateral institutions have been championed as alternatives to Western organs of political and economic power such as Nato, the International Monetary Fund, and the World Bank.

From the growth of the Shanghai Cooperation Organization to the establishment of the Eurasian Economic Union, China’s “One Belt, One Road” strategy to link much of the Eurasian landmass via trade and investment, and most recently the establishment of the Asian Infrastructure Investment Bank, many have viewed these developments as essential for the decentralization of global power away from the imperial centers of Washington, Wall Street, London and Brussels.

But perhaps none of the emerging Global South international groupings has been more promising in terms of both public relations and real economic partnership than that of the BRICS countries (Brazil, Russia, India, China and South Africa).

BRICS countries account for 46 percent of the world’s population – over three billion people, as of 2015 – making it the single largest bloc in terms of human capacity among global alliances. The scope of BRICS, combined with its increasing assertiveness as an economic power unto itself, has undoubtedly ruffled a few feathers in Washington and elsewhere in the West.

It should come as no surprise that major moves have been taken in the last twelve to 24 months to undermine each BRICS member nation and destabilize them through political and economic means. And it is no coincidence that those leaders shown smiling and shaking hands at recent BRICS summits are now either the targets of destabilization efforts and subversion – as in the cases of Brazil, Russia, China and South Africa – or are a target of a military and political charm offensive, as in the case of India. In each case, the United States and its allies benefit significantly from the latest developments.

Brazil in the Crosshairs

One of the US empire’s tried and true methods of destabilizing a targeted country is through manufacturing and promoting political scandals and/or political movements that appear oppositional but whose interests, whether consciously or not, align with the ruling establishment in the West. Both of these elements are at play in Brazil, which has been moving toward increased economic, and consequently political, independence in recent years.

In Brazil, the government of Dilma Rousseff is facing a major destabilization campaign orchestrated by powerful right-wing elements in the country and their US backers. Under the always convenient banner of “anti-corruption”, millions have turned out in the streets to demand the ouster of the twice-elected Rousseff government on the heels of a series of revelations about alleged corruption pertaining to the quasi-state, quasi-private Petrobras oil company.

According to the allegations, a number of leading political figures, some of whom are connected to President Rousseff and the Workers’ Party, have skimmed at least three percent of the billions in oil revenue from Petrobras, illustrating the still active tradition of corruption in Brazil.

The latest target is former President Lula da Silva, who was forcibly removed from his home in an ostentatious show of force by law enforcement authorities meant to humiliate the seventy-year-old founder of the Workers’ Party. Because of his working class background, the former president was seen as the hope and pride of the left in Brazil, and the public removal from his home earlier this month sparked the latest round of protests.

But what – or who – is really behind the soft coup in Brazil?

The right wing is the driving force of the protests, despite any progressive-minded, anti-corruption sentiment being expressed by various segments of the protest movement. Two of the principal groups responsible for organizing and mobilizing the demonstrations are the Free Brazil Movement (“MBL”) and Students for Liberty (“EPL”), both of which have direct ties to Charles and David Koch, the right-wing, neocon, US billionaires, as well as other leading figures of the far right, pro-business neoliberal establishment.

MBL is fronted by Fabio Ostermann and Juliano Torres, both of whom were educated in the Atlas Leadership Academy, a satellite of the Atlas Economic Research Foundation, which is directly funded by the Koch brothers. EPL is a direct affiliate of the US-based Students for Liberty, a well-known Koch brothers outfit with deep ties to the right-wing political establishment in the US

One of the leading faces of the movement is Kim Kataguiri, a twenty-year-old “activist”, who is both a founder of MBL and a leader in EPL. Unabashedly pro-big business, he’s an adherent of the so-called Austrian School of Economics, the economic ideology that advocates total deregulation of the economy in the interests of private business, and a great admirer of Milton Friedman, the father of what is known today as neoliberal capitalism.

Kataguiri and his fellow right-wing activists have been quick to distance themselves from the blood-soaked legacy of right-wing coups in Brazil and Latin America for obvious reasons. Yet they espouse precisely the same economic policies as those enacted throughout the region, perhaps most famously in Chile under the brutal dictatorship of Augusto Pinochet, whose economic policies were directly guided by none other than Friedman.

As Kataguiri explained to The Guardian in 2015:


We defend free markets, lower taxes and the privatisation of all public companies … In Brazil, the left is still seen as cool by young people …  We want to destroy this idea that if you defend free markets then you’re an old man who is asking for a dictatorship … Unfortunately, we don’t have any big sponsors. The government and some sectors of the press say that we are financed by rich people. We would have no problem in being financed by rich people.


Unfortunately for Kataguiri, Ostermann, Torres and their colleagues, the truth about their connections to powerful finance capital and business in the US and throughout Latin America is well known. Still, the corporate media whitewashes these connections, presenting the protests as some sort of pure expression of people’s discontent, rather than a manufactured form of political manipulation and destabilization which has seized upon difficult economic times to cynically exploit public opinion. Brazil’s economic downturn over the past two years has made this much easier.

Other influential groups such as VemPraRua (“Come to the Streets”) are directly funded by powerful right-wing business interests inside the country, including Brazil’s richest man, Jorge Paulo Lemann. As Bloomberg noted in a 2013 profile of Lemann:


In the US, Lemann is virtually unknown, even though he and his two longtime partners, Marcel Herrmann Telles and Carlos Alberto Sicupira, now control three icons of US consumer culture: Heinz ketchup, Burger King, and, after the $52 billion takeover of Anheuser-Busch in 2008, Budweiser beer. The combined market value of the companies they run is $187 billion – larger than that of Citigroup.

In Brazil, Lemann is a business-class hero … Worth some $20 billion, Lemann is Number 32 on the Bloomberg Billionaires Index, seven slots behind George Soros and three ahead of Carl Icahn.


Meanwhile, the reactionary, pro-US elements inside (and outside) Brazil are particularly angered at the Workers’ Party and, more broadly, the left. This is not because of corruption – though corruption undoubtedly remains a problem – but because of the ascendance to power of political forces representing working class and poor Brazilians.

As the North American Congress on Latin America correctly assessed in April 2015: “Don’t believe the right-wing media’s emphasis on corruption – the recent demonstrations are motivated by entrenched elite discontent over expanding economic and political inclusion for the nation’s majority.

Bringing BRICS to Heel

In short, despite all the fancy anti-corruption rhetoric, the assault on Rousseff’s leftist government is the result of a coordinated campaign by business interests tied to the US Washington and Wall Street that see in Brazil a dangerous precedent in which a left-wing government sympathetic to and allied with Bolivarian movements in Venezuela, Bolivia, Ecuador, and until recently, Argentina, was able to gain power and preside over an economic boom.

Indeed, this point should not be understated – namely, the economic downturn in commodities such as oil which has put the brakes on Brazil’s rapid economic progress.

In fact, recent data shows that the expansion of anti-government sentiment directly correlates to the stagnation of GDP growth, which itself directly correlates to the decline in commodities prices. As many have convincingly argued, the collapse of oil has no doubt been fomented and encouraged, if not directly orchestrated, by the US and its allies in the Gulf in order to target non-Western countries whose economies are tied to oil and gas revenue – Venezuela, Bolivia, Brazil, and especially Russia.
Essentially, what’s unfolding in Brazil is a multi-pronged effort to destabilize the country via a variety of political and economic means, with the ultimate goal of bringing to heel a key member of BRICS. But it is not the only one.

Brazil is certainly not the only BRICS member facing an offensive by the US-Nato system. The next article in this series will examine the destabilizing forces reaching into South Africa. Future pieces will examine the growing military relationship between the US and India, as well as the multi-faceted strategies to contain, isolate, and destabilize Russia and China.


Eric Draitser is a geopolitical analyst based in New York and the founder of StopImperialism.

Copyright (c) 2012 MintPress. All rights reserved.

BRICS Under Attack: The Empire Strikes Back In Brazil

Categories: Uncategorized

Is Washington Preparing for War Against Russia?

by Brian Cloughley

The Smirking Chimp (April 29 2016)

You may find it difficult to believe the content of a speech {1} by US President George W Bush in November 2001 when he met with President Putin in Texas and, among other things, declared that “a lot of people never really dreamt that an American president and a Russian president could have established the friendship that we [have]”.

He went on to say that


When I was in high school, Russia was an enemy. Now the high school students can know Russia as a friend, that we’re working together to break the old ties, to establish a new spirit of cooperation and trust so that we can work together to make the world more peaceful.


How sensible. How optimistic.

But, regrettably, how wrong. Because the United States administration, at the urging of the Pentagon and its sub-office in Brussels, the Headquarters of the North Atlantic Treaty Organization, had already embarked on a policy of confrontation with Russia, encouraging and subsidizing expansion of that expressly anti-Russia military alliance from sixteen to its present 28 countries.

There were corporate benefits for the US along the way, of course. Eight Nato countries bought hundreds of F-16s and all the add-ons, for example, and “Nato Standardization” was military code for “Buy American”. The State Department is barefaced about this. Its head of the Bureau of Political-Military Affairs, Andrew J Shapiro, proudly declared {2} that “We view the American defense industry as an integral part of our efforts to advance US national security and foreign policy”. You can’t be more open than that.

Mr Shapiro made it clear that the policy of the United States of America is:


When a country buys an advanced US defense system through our … programs, they aren’t simply buying a product, they are also buying into a relationship. These programs both reinforce our diplomatic relations and establish a long-term security relationship. What is generally under-appreciated is that the complex and technical nature of advanced defense systems frequently requires constant collaboration and interaction between countries over the life of that system – decades in many cases.


Two years after President Bush welcomed President Putin to Texas, Nato welcomed eight more nations as members, increasing its military presence ever closer to Russia’s border. Moscow was presumably meant to ignore this menacing development, while Nato’s aircraft flew intelligence-gathering missions along its borders, and US combat ships of its massive nuclear-armed Sixth Fleet made coat-trailing forays into the Black Sea. (One of them ran aground {3}, which might show that Russia doesn’t have too much to worry about; but it’s the thought that counts.)

President George W Bush was probably one of the most stupid and disastrous presidents ever self-inflicted by an American electorate (so far). But he was right in declaring {4} that “I believe the US-Russian relationship is one of the most important relationships that our country can have, and the stronger the relationship is, the more likely it is the world will be at peace …”

The fact that Russia’s unqualified priority was trade, initially with Europe but expanding throughout the globe, was welcomed by all except the warmongers of Nato and the Pentagon whose foremost priority was justification of Nato’s existence. It didn’t matter to them that Russia was concentrating on improving its economy for the benefit of its people and that its defense budget was comparatively tiny. They wanted a reason for Nato to exist, because embarrassing questions were being asked about the need for such an expensive military grouping to endure when the reason for its creation and very existence was simply and solely to counter the perceived military threat from the Soviet Union that had ceased to exist. In the year of President Putin’s visit to Texas, Russia’s expenditure {5} on defense was 36 billion dollars, while that of the US was {6} 290 billion and the European Nato countries’ total {7} was 158 billion.

In 2015, as reported {8} by Britain’s Daily Telegraph, the United States spent 569 billion dollars on its military while Russia’s defense budget was 53 billion. The Telegraph and most other western media and many allegedly independent think-tanks noted that the US military budget had decreased from the previous year’s 610 billion, and applauded the reduction – without noting that the US-Nato draw-down in Afghanistan had resulted in far less expenditure on that disastrous war, which has cost the US taxpayer a fortune.

The mantra of those who advocate and approve massive military spending is that there are threats from Russia and China. In the case of Russia this assertion is founded on the Ukraine debacle, and it is fitting to briefly examine the allegation in the light of what actually went on.

The United States encouraged {9} a coup in Ukraine in 2014, and although the Ukrainian news agency Interfax reported {10} in June 2015 that President Poroshenko stated that the overthrow of his predecessor was “unconstitutional” there was no change to the ceaseless western propaganda line {11} that the coup was entirely democratic. Similarly the allegations that Crimea was “annexed” by Russia have been successful to the point that very few in the west believe that, as the UK’s Independent newspaper reported {12}, “Fireworks exploded and Russian flags fluttered above jubilant crowds after residents in Crimea voted overwhelmingly to secede from Ukraine and join Russia”. The referendum was a perfectly fair expression of opinion in Crimea. Indeed it would have been very surprising if the vote hadn’t gone in favor of rejoining Russia, because it is undeniable that the vast majority of Crimea’s citizens are Russian-cultured and Russian-speaking, and regard western Ukrainians as foreigners.

The main point, however, is the allegation that Russia was in some way seeking to invade Ukraine itself. There is no doubt that Russia was and continues to be supportive of the separatists of eastern Ukraine, but the notion that Russia wanted or wants to attack and occupy Ukraine is ludicrous.

Russia doesn’t want to attack Ukraine, or any other country. What possible benefit would accrue to Russia by going to war? All that Russia wants to do is to trade with as many countries as possible and ensure that Russian-cultured people on its borders are treated fairly and according to their wishes.

President Obama has followed the war-advocates of the Pentagon in what can be described only as a slavish manner. His diatribe on Crimea was directed personally against President Putin and his arrogant boast {13} that “We will not accept Russia’s occupation of Crimea” was an aggressive declaration of indefinite confrontation.

Little wonder that General Philip Breedlove, the commander of the US European Command, and Nato’s “Supreme Allied Commander Europe”, declared {14} that “we are prepared to fight and win” against Russia. He has announced {15} that Russia has “chosen to be an adversary and poses a long-term existential threat” to the United States, and therefore “This year’s budget request reflects our solemn commitment to the security of our allies and partners”.

So up goes US military expenditure yet again, and the Pentagon’s generals and the Wall Street investors and the weapons manufacturers all over the United States rub their hands in delight. These snaky schemers are what the great President Eisenhower called the “military industrial complex” of seemingly patriotic Americans who, in the final essence, are America’s own worst enemy.

In 2001 when President Bush met with President Putin he said {16} that


… the more I get to know President Putin, the more I get to see his heart and soul and the more I know we can work together in a positive way. And so anytime leaders can come together and sit down and talk about key issues in a very open and honest way, it will make relations stronger in the long run.


He was absolutely right: but President Obama prefers military-industrial confrontation to talking with President Putin in “a very open and honest way”.

Washington’s changed attitude to Russia is not only petulant and immature, it is extremely dangerous. President Obama “will not accept” the fact that Crimea is once again part of Russia, at the wish of its citizens. So what is he going to do about it? What advice is he receiving from his bellicose generals and the devious Ashton Carter? Why has he sent B-52 nuclear bombers to the Gulf region? Why has he sent F-22 combat aircraft to Romania? Why is he sending another armored brigade to Eastern Europe? Why is he expanding the US presence at its 21 military bases in Europe?

He is preparing for war. And don’t forget the profit motive.


Brian Coughley’s web site is {17}


















Categories: Uncategorized

Socialize the Banks

by Nuno Teles, Jacobin (April 27 2016)

Breaking up the banks won’t do. They should be publicly owned and democratically controlled.

Nine years after the onset of the international financial crisis, its effects are still with us.

These days observers worry about banks – European institutions like Germany’s Deutsche Bank, France’s Societe Generale, and Italy’s Monte di Pascoale, not to mention the zombie banks that populate the austerity-ridden eurozone periphery in Greece, Portugal, and Spain. These big banks are widely seen as global capitalism’s next weak link, capable of causing massive financial instability if they go bust.

Such concern isn’t particularly surprising – banks were at the center of the latest crisis from the beginning. Indeed, it wasn’t subprime market defaults that unleashed the destructive financial turmoil of 2007~2008, but their ruinous impact on a major investment bank, Lehman Brothers. Lehman’s failure – and the state’s subsequent refusal to bail out the bank – created a credit crunch that sent the entire financial sector, as well as the world economy, into a tailspin.

As the US crisis morphed into the eurozone crisis, banks were again at the epicenter. The debt burden of peripheral states and the prospect of their default threatened the solvency of the entire European banking sector, which had lent to agents public and private.

Europe’s major banks, already troubled by their souring US investments (among other things) faced collapse. Only the quick substitution of bank-held debt for official debt – taken on from the troika of European lenders and the IMF in return for punitive fiscal austerity – saved them.

Yet here we are today, facing another potential wave of failing banks. The lingering instability highlights the hollowness of the G-20 countries’ pledges to reform the financial sector in 2008~2009. Promises to “extend regulatory oversight and registration to Credit Rating Agencies”, “take action against non-cooperative jurisdictions, including tax havens”, and “prevent excessive leverage and require buffers of resources to be built up in good times” have yielded little substantive change.

Granted, bank reform legislation has been passed in both the US and Europe. The Dodd-Frank Act in the US, the Eric Liikanen working group recommendations in the European Union, and, ultimately, the Bank of International Settlements’ Basel III regulation all raised capital and liquidity requirements and produced new resolution mechanisms for banks.

But once the initial shock of the crisis passed, banks lobbied intensely to water down the rules, and regulators set an extremely low bar for compliance. The banking business, in short, resumed its old practices – but now in a financial landscape marked by even larger banks that posed far greater systemic risks to the world economy.

The Left and Credit

So as the banks have a field day, where is the Left?

Seemingly nowhere to be found. In the core capitalist countries, the Left has repeatedly failed to crawl out from its defensive trenches and seize the opportunity that the crisis opened. Proposals concerning the financial sector have been weak at best, limited to regulation and taxation measures, such as the popular “Tobin Tax”.

Meanwhile, questions about how banks should be organized and governed aren’t even raised. The Left has either latched onto market-based arguments of “let them fail” or turned to more benign liberal solutions like breaking up big banks. As a result, it has failed to contribute to crucial debates about modern capitalism’s pivotal institutions.

Part of the reason why is the Left’s profound weakness: it has little capacity to propose and implement new policies that benefit the working class. But the Left’s tendency to shy away from debates about banks and finance is rooted in other factors as well.

For one, the Left tends to emphasize production over circulation, the sphere where finance is located. As a result the role of finance is under-examined, dismissed as a big Ponzi scheme that capital escapes to when it’s faced with a “structural blockage” in the sphere of production.

At the same time (particularly since the 2008~2010 crisis), the Left has viewed credit with extreme suspicion, often seeing it as an inherent evil to be restrained.

But while the effects of financialization have been dire for many ordinary people, credit is central to any economy, capitalist or otherwise.

As pointed by the political economist, Costas Lapavitsas, originating in the pre-capitalist exchange of commodities (like cloth and foodstuffs), credit is predicated on the lender-borrower interaction: the lender knows something about the borrower’s material circumstances, then chooses whether to enter into a relationship defined by the “promise to pay”.

In capitalism – where loanable capital is common and often doled out by banks – the social relations behind credit are quite depersonalized. Borrowers are much more homogenized, and their ability to repay is gauged by purportedly objective criteria like present-day credit scores.

Banks integrate and mobilize these criteria – information that is unavailable to other economic agents – through their privileged access to the financial dealings of firms and households.

The ability to assess the soundness of a borrower’s “promises to pay” puts banks in a powerful position. And this position is reinforced by banks’ other information-gathering activities – account management, asset management, foreign exchange – which fall outside lending activities but are at the core of investment banking.

The terrain on which banks operate (and compete) has been in flux since the 1970s. Liberalization, deregulation (and capital-friendly re-regulation) of financial markets, and the rollback of public services have conspired with new technologies to create entirely new financial markets, products, and agents.

Financial income, in turn, has migrated to more and more sectors, including housing (in the form of mortgage payments), pensions (commissions and fees charged on private pension funds), and even utilities (bonds and similar mechanisms for financing infrastructure).

The rise of capital markets and the emergence of new financial agents have not caused the traditional banking sector to wither. New markets opened by public policy, new credit assessment instruments, and faster access to data have simply given banks new agents and markets to loan money to – like households, who have become the main recipients of loanable capital in most developed countries, particularly in the form of mortgages.

Banks have also entered the lucrative market of managing savings and financial assets. As a result, banks have grown bigger, with expanding balance sheets and increasing profits relative to the overall economy.

Contemporary states have helped spur this financialization of the global economy, expanding their purview far beyond constructing new financial markets or transforming the provision of different goods and services for capital’s benefit. Governments today play a paramount role in backing banks’ power.

The reason is fairly straightforward: banks hold, through deposits, “promises to pay” that have a shorter maturity than their assets (others’ promises to pay). Or, more simply, they owe more than they hold at any given time. This imbalance is a source of potential fragility, as was clear during the 2008 liquidity shortage.

In order to prevent boom-and-bust cycles, the state stepped in, providing a financial backstop through its control of the money supply. Banks are given exclusive access to central bank reserves, which banks use to settle their liabilities. By conferring on banks the ability to create credit (and money) – a right that other economic agents don’t have – states give banks an incomparable power over the rest of the economy.

The Case for Public Banks

The special relationship between banks and the state became clear in the recent financial meltdown. As trust in the money markets evaporated, banks became dependent on state institutions to survive, let alone thrive.

Banks relied on emergency loans from central banks to sustain their liquidity mismatch, which would have otherwise thrown them quickly into bankruptcy. Governments also restored their solvency through emergency programs. States bought billions of dollars of worthless assets (through the Troubled Asset Relief Program in the US, for instance) or added regulatory capital through contingent bonds and tax credits or public money transfers (as with the UK’s “temporary” nationalizations).

States provided implicit and explicit subsidies to banks by boosting guarantees on deposits, carrying out unprecedented quantitative easing programs that granted banks safe returns through asset buying, and lowering interest rates to historic lows, thereby reducing banks’ funding costs.

The transfer of public resources to private banks was extraordinary. Yet the rescue measures were wrapped in financial jargon and a sense of political inevitability, and so, despite some halfhearted grumbling by lawmakers, they largely escaped public scrutiny.

That may be changing. The state’s heavy footprint in the financial sector is making it increasingly difficult to argue banks should remain privately owned. Why should profits accrue to shareholders, after all, when the risks and losses are socialized?

Public banks are not a novelty of course. Many countries, such as Germany and France, have long had such institutions, either in the form of commercial banks or development banks that provide loans to specific economic sectors.

And public ownership alone is no silver bullet for challenging global capitalism and its attendant crises. More often than not, these banks behave no differently than their private counterparts, or are controlled by public bureaucracies that end up serving particular private interests.

Simply put, public ownership of banks is necessary but not sufficient.

For public control to be liberatory, it must be part of an expansive vision that reshapes the practices and uses of credit along egalitarian lines. Private finance has promoted the commodification of (and shaped the organization of) key sectors like health and education. Taking control of credit must mean democratizing access to these essential services.

On the question of bank governance, it is not enough to have public officials in charge. Unions, social movement actors (like consumer organizations), and elected officials from both local and central government must have a role in their management. A progressive finance policy can only be enacted when a variety of societal actors, who all possess specific knowledge and interests, have a say in the organization and provision of credit.

Considering the global nature of contemporary finance, any plan to socialize the credit system – and reform the relation between money, credit, and state – must also take into account the highly unequal power relations that characterize the global economy.

US, as issuer of the dollar, controls a quasi-world currency that’s commonly used to settle international liabilities even between non-American agents. This gives the US immense power over the world economy, unmatched by any other country.

Through its own banks, the US controls the quantity and price (interest rates) of dollars used across the globe. (The euro – which is primarily controlled by Germany, the eurozone’s biggest economy – also enjoys global reach.)

In this context, any attempt to socialize the credit system must take into account the specificities of each country: how it is integrated into the world economy and how it can be disconnected from the chains of international finance and gain the space it needs to pursue its own economic and social policies.

Its balance of payments position, external indebtedness, and foreign currency reserve position are constraints that have to be dealt with on a case-by-case basis. For instance, it is difficult to imagine how any peripheral country in the eurozone could nationalize its banks without breaking with the euro, regaining sovereignty over its own currency, ending central bank independence, and introducing strict capital controls.

After years of financial crisis, rising inequality, and “secular stagnation”, the time is ripe for the Left to advance an egalitarian project that places finance at the center. This doesn’t mean a “one size fits all” program. Each country will have to devise its own socialized system of credit. But the goal will be clear, across borders and states: a more equitable, democratic international economic order.

Categories: Uncategorized

Eurasia Silk Road Economic Transformation

by F William Engdahl

New Eastern Outlook (April 25 2016)

Over recent months I have often written about the potential of China’s strategic One Belt, One Road Eurasian and Asian infrastructure Great Project to act as a global economic transformer toward positive, sustained economic growth. It’s becoming clear by the day that strategic economic planners in Beijing have been working out specific details of how best to use the new high-speed rail infrastructure project spanning the vast space of Eurasia from Beijing across Russia and the states of the Russia-led Eurasian Economic Union including Kazakhstan, Armenia, Belarus and on to the west to include, so far, states of eastern and central Europe. A series of recent agreements by Chinese companies in Kazakhstan gives a hint of the economic boom being planned.

As I have written in previous posts, China’s One Belt, One Road project, currently the largest real economy infrastructure project in the world, is not merely about building faster rail pathways from China across Eurasia’s vast landmass to Europe to hasten freight delivery times. It’s about transforming one of the previously most forgotten regions of the world into a vibrant and growing new economic space, about bringing technology and industry into some very backwater parts of Central Asia that also happen to be blessed with some of the world’s richest minerals concentrations. Without modern transportation infrastructure, those mineral and other riches lay dormant.

For China, the One Belt, One Road is also referred to as the New Silk Road, a reference to the ancient Eurasian overland trade routes and sea routes linking China trade to that of all Eurasia, the now-Middle East and on to Venice and Europe some two thousand years ago initiated by China’s Han Dynasty. At that time, the Silk Road routes went from China through India, Asia Minor, up through Mesopotamia to Egypt, the African continent, Greece, Rome, and even Britain. The northern Mesopotamian region, today Iran, became China’s closest partner in trade.

China, whose civilization was then far more advanced than that of Europe, sent to Europe paper, an invention of China during the Han Dynasty. They sent gunpowder, and increasingly, silk, along with the rich spices of the east. To date, the New Economic Silk Road project encompasses some sixty countries from Central Asia, Russia, Iran and on to Serbia and eastern European markets.


China’s ancient silk road enabled contact between Han China and the west and a flourishing trade and culture exchange some two thousand years ago


Earlier I commented on Chinese plans to route the rail projects of the Silk Road to enable more economic mining and export of gold, the world’s historically most beautiful of all metals.

By the time of the Roman Emperor Augustus, 27 BC ~ 4 AD, trade between China and the west was firmly established; silk, whose origins the Chinese kept a state secret, was the most sought commodity in Egypt, Greece, and, especially, in Rome. More than the mere trade in goods from East to West and back, the original Silk Road made possible a vast cultural exchange between peoples in art, religion, philosophy, technology, language, science, architecture. Every aspect of civilization was exchanged through the Silk Road along with the trade goods the merchants carried from country to country.

Today’s One Road

The historical reference is important to better understand that the Chinese leadership has drawn deeply into their cultural heritage in conceiving the new Silk Road, the One Belt, One Road. Few, even in today’s China, as I realized during a conference this year in Beijing, where I was invited to speak on the significance of China’s new Great Infrastructure Project, realize the deeper importance of this initiative, not only for the economy of China. A few examples indicate the economic transformation of Central Asia which the One Belt, One Road project has catalyzed in its first months.

Earlier I commented on Chinese plans to route the rail projects of the Silk Road to enable more economic mining and export of gold, the world’s historically most beautiful of all metals.


A recent sketch (above top) of the various land and sea routes for the New Silk Road indicates its enormous scope, though the current version (bottom) adds a direct rail link through Russia from Kazakhstan following the May 2015 agreement between Putin and China’s XI


In May 2015 China set up a state-run Gold Investment Fund to create a pool, initially of $16 billion, making it the world’s largest physical gold fund. It will support gold mining projects along the Economic Silk Road. China stated that the aim is to enable the Eurasian countries along the Silk Road to increase the gold backing of their currencies. The countries along the Silk Road contain most of the world’s people and natural and human resources utterly independent of any the West has to offer.

China’s Shanghai Gold Exchange has formally established the “Silk Road Gold Fund”. The two main investors in the new fund are China’s two largest gold mining companies. The fund will invest in gold mining projects along the route of the Eurasian Silk Road railways, including in the vast under-explored parts of the Russian Federation.

The China gold mining cooperation extends to Russia, today rapidly becoming the closest strategic partner of China. China National Gold Group Corporation has signed an agreement with the Russian gold mining group, Polyus Gold, Russia’s largest gold mining group, and one of the top ten in the world, to explore the gold resources of Russia’s largest gold deposit at Natalka in the far eastern part of Magadan’s Kolyma District. While it is not widely known outside the gold mining industry, China is today the world’s largest gold mining country having passed the declining South African output several years ago. Russia is number three in the world. Kazakhstan and other Central Asian countries now on the Silk Road have large untapped gold reserves that will become economical with the link of rail infrastructure.

Copper Too

China has also targeted the vast untapped copper reserves of the countries along the Silk Road. Mining experts estimate that China’s investments for strategic Silk Road copper supply will run into the tens or even hundreds of billions. In 2014 China was the largest importer of copper for its industry, drawing an impressive forty percent of all world copper imports. Now the country clearly looks for more secure – Australia is a prime USA military partner for the Obama ‘Asia Pivot’ aimed at China-and more economical sources along the Silk Road.

Kazakhstan, whose President Nursultan Nazarbayev proposed the idea of a new Economic Silk Road in a 2013 meeting with Xi Jinping, has been a significant focus for China copper agreements and joint projects. Kazakhstan has high-grades of copper in the east-central part, similar to Africa’s famous Copperbelt. It’s also technically easy to exploit. China Development Bank has provided $4.2 billion in credit to KAZ Minerals, a major Kazakh mining company.

Kazakhstan’s eastern region and bordering parts of northern Kyrgyzstan have a number of copper-bearing rock or porphries, estimated at billions of tons. That same porphyry belt extends into Mongolia, a new addition to China’s Silk Road. Recently Mongollia confirmed a huge copper discovery, the Oyu Tolgoi mega-discovery with some 6.5 billion tons total resource. Other Silk Road copper prospects lie in Iran, Turkey should things calm there, and Serbia.

And it’s not only development of Eurasia’s vast untapped gold and copper resources that interests Chinese companies. On December 17, a group of Chinese companies visiting Kazakhstan signed a number of major agreements with the world’s largest uranium producer. CGN Mining, a listed subsidiary of China General Nuclear Power Corporation, took a minority stake in Kazakh uranium deposits, in a deal that includes construction of a nuclear fuel assembly production plant. The entire fuel supply will go to fuel China’s growing nuclear power construction to offset coal power.

During the same talks in Kazakhstan, China’s CEFC Energy bought a 51% share in a subsidiary of Kazakh state oil and gas firm KazMunayGaz, which operates refineries and gas stations, as well as fertilizer plants, across Europe. And China National Chemical Engineering agreed to construct a natural gas-fueled chemical complex in Kazakhstan.

This is but the first of what will ultimately be a market spanning the largest land expanse in the world, Eurasia, with the world’s largest population, educated manpower, world-class scientists and engineers and a desire to build, not to destroy. It’s heartening that such peaceful initiatives are growing. It damn sure beats the war agenda of Washington and Nato.


F William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”.

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Censored, Surveilled, Watch Listed and Jailed

The Absurdity of Being a Citizen in the American Police State’

by John W Whitehead

A Government of Wolves (April 25 2016)


You had to live – did live, from habit that became instinct – in the assumption that every sound you made was overheard, and, except in darkness, every movement scrutinized.

– George Orwell, 1984


In past ages, those who dared to speak out against tyranny – viewed as an act of treason – were blinded, castrated, disfigured, mutilated, rendered mute by having their tongues cut out of their heads, and ultimately crucified.

In the American police state, the price to be paid for speaking truth to power (also increasingly viewed as an act of treason) is surveillance, censorship, jail and ultimately death.

It’s a diabolically ingenious tactic for muzzling, disarming and ultimately eliminating one’s critics or potential adversaries.

However, where many Americans go wrong is in assuming that you have to be doing something illegal or challenging the government’s authority in order to be flagged as a suspicious character, labeled an enemy of the state and locked up like a dangerous criminal.

In fact, as I point out in my book Battlefield America: The War on the American People (2015), all you really need to do is use certain trigger words, surf the internet, communicate using a cell phone, drive a car, stay at a hotel, purchase materials at a hardware store, take flying or boating lessons, appear suspicious, question government authority, or generally live in the United States.

With the help of automated eyes and ears, a growing arsenal of high-tech software, hardware and techniques, government propaganda urging Americans to turn into spies and snitches, as well as social media and behavior sensing software, government agents are spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words”, and “suspicious” activity reports aimed at snaring potential enemies of the state.

It’s the American police state’s take on the dystopian terrors foreshadowed by George Orwell, Aldous Huxley and Phillip K Dick all rolled up into one oppressive pre-crime and pre-thought crime package.

What’s more, the technocrats who run the surveillance state don’t even have to break a sweat while monitoring what you say, what you read, what you write, where you go, how much you spend, whom you support, and with whom you communicate. Computers now do the tedious work of trolling social media, the internet, text messages and phone calls for potentially anti-government remarks – all of which is carefully recorded, documented, and stored to be used against you someday at a time and place of the government’s choosing.

While this may sound like a riff on a bad joke, it’s a bad joke with “we the people” as the punchline. Yet it is no laughing matter that Americans are being jailed for growing orchids, feeding whales, collecting rainwater, and praying in their backyards. There is nothing humorous about Americans having their families terrorized by SWAT teams, their pets killed, their children shot, their homes trashed and their privacy shredded. And there’s really not much comic relief to be found when the citizenry is forced to pay their own government to jail, spy on, censor, terrorize and kill them.

The following activities are guaranteed to get you censored, surveilled, eventually placed on a government watch list, possibly detained and potentially killed.

Laugh at your own peril.

Use harmless trigger words like cloud, pork and pirates: The Department of Homeland Security has an expansive list of keywords and phrases it uses to monitor social networking sites and online media for signs of terrorist or other threats. While you’ll definitely send up an alert for using phrases such as dirty bomb, Jihad and Agro terror, you’re just as likely to get flagged for surveillance if you reference the terms SWAT, lockdown, police, cloud, food poisoning, pork, flu, Subway, smart, delays, cancelled, la familia, pirates, hurricane, forest fire, storm, flood, help, ice, snow, worm, warning or social media.

Use a cell phone: Simply by using a cell phone, you make yourself an easy target for government agents – working closely with corporations – who can listen in on your phone calls, read your text messages and emails, and track your movements based on the data transferred from, received by, and stored in your cell phone. Mention any of the so-called “trigger” words in a conversation or text message, and you’ll get flagged for sure.

Drive a car: Unless you’ve got an old junkyard heap without any of the gadgets and gizmos that are so attractive to today’s car buyers (GPS, satellite radio, electrical everything, smart systems, et cetera), driving a car today is like wearing a homing device: you’ll be tracked from the moment you open that car door thanks to black box recorders and vehicle-to-vehicle communications systems that can monitor your speed, direction, location, the number of miles traveled, and even your seatbelt use. Once you add satellites, GPS devices, license plate readers, and real-time traffic cameras to the mix, there’s nowhere you can go on our nation’s highways and byways that you can’t be followed. By the time you add self-driving cars into the futuristic mix, equipped with computers that know where you want to go before you do, privacy and autonomy will be little more than distant mirages in your rearview mirror.

Attend a political rally: Enacted in the wake of 9/11, the Patriot Act redefined terrorism so broadly that many non-terrorist political activities such as protest marches, demonstrations and civil disobedience were considered potential terrorist acts, thereby rendering anyone desiring to engage in protected First Amendment expressive activities as suspects of the surveillance state.

Express yourself on social media: The FBI, CIA, NSA and other government agencies are investing in and relying on corporate surveillance technologies that can mine constitutionally protected speech on social media platforms such as Facebook, Twitter and Instagram in order to identify potential extremists and predict who might engage in future acts of anti-government behavior. A decorated Marine, 26-year-old Brandon Raub was targeted by the Secret Service because of his Facebook posts, interrogated by government agents about his views on government corruption, arrested with no warning, labeled mentally ill for subscribing to so-called “conspiratorial” views about the government, detained against his will in a psych ward for having “dangerous” opinions, and isolated from his family, friends and attorneys.

Serve in the military: Operation Vigilant Eagle, the brainchild of the Deptartment of Homeland Security, calls for surveillance of military veterans returning from Iraq and Afghanistan, characterizing them as extremists and potential domestic terrorist threats because they may be “disgruntled, disillusioned or suffering from the psychological effects of war”. Police agencies are also using Beware, an “early warning” computer system that tips them off to a potential suspect’s inclination to be a troublemaker and assigns individuals a color-coded threat score – green, yellow or red – based on a variety of factors including one’s criminal records, military background, medical history and social media surveillance.

Disagree with a law enforcement official: A growing number of government programs are aimed at identifying, monitoring and locking up anyone considered potentially “dangerous” or mentally ill (according to government standards, of course). For instance, a homeless man in New York City who reportedly had a history of violence but no signs of mental illness was forcibly detained in a psych ward for a week after arguing with shelter police. Despite the fact that doctors cited no medical reason to commit him, the man was locked up in accordance with a $22 million program that monitors mentally ill people considered “potentially” violent. According to the Associated Press, “A judge finally ordered his release, ruling that the man’s commitment violated his civil rights and that bureaucrats had meddled in his medical treatment”.

Call in sick to work: In Virginia, a so-called police “welfare check” instigated by a 58-year-old man’s employer after he called in sick resulted in a two-hour, SWAT team-style raid on the man’s truck and a 72-hour mental health hold. During the standoff, a heavily armed police tactical team confronted Benjamin Burruss as he was leaving an area motel, surrounded his truck, deployed a “stinger” device behind the rear tires, launched a flash grenade, smashed the side window in order to drag him from the truck, handcuffed and searched him, and transported him to a local hospital for a psychiatric evaluation and mental health hold. All of this was done despite the fact that police acknowledged they had no legal basis nor probable cause for detaining Burruss, given that he had not threatened to harm anyone and was not mentally ill.

Limp or stutter: As a result of a nationwide push to certify a broad spectrum of government officials in mental health first-aid training (a twelve-hour course comprised of PowerPoint presentations, videos, discussions, role playing and other interactive activities), more Americans are going to run the risk of being reported for having mental health issues by non-medical personnel. Mind you, once you get on such a government watch list – whether it’s a terrorist watch list, a mental health watch list, or a dissident watch list – there’s no clear-cut way to get off, whether or not you should actually be on there. For instance, one 37-year-old disabled man was arrested, diagnosed by police and an unlicensed mental health screener as having “mental health issues”, apparently because of his slurred speech and unsteady gait, and subsequently locked up for five days in a mental health facility against his will and with no access to family and friends. A subsequent hearing found that Gordon Goines, who suffers from a neurological condition similar to multiple sclerosis, has no mental illness and should not have been confined.

Appear confused or nervous, fidget, whistle or smell bad: According to the Transportation Security Administration’s 92-point secret behavior watch list for spotting terrorists, these are among some of the telling signs of suspicious behavior: fidgeting, whistling, bad body odor, yawning, clearing your throat, having a pale face from recently shaving your beard, covering your mouth with your hand when speaking and blinking your eyes fast. You can also be pulled aside for interrogation if you “have ‘unusual items’, like almanacs and ‘numerous prepaid calling cards or cell phones'”. One critic of the program accurately referred to the program as a “license to harass”.

Allow yourself to be seen in public waving a toy gun or anything remotely resembling a gun, such as a water nozzle or a remote control or a walking cane, for instance: No longer is it unusual to hear about incidents in which police shoot unarmed individuals first and ask questions later. John Crawford was shot by police in an Ohio Wal-Mart for holding an air rifle sold in the store that he may have intended to buy. Thirteen-year-old Andy Lopez Cruz was shot seven times in ten seconds by a California police officer who mistook the boy’s toy gun for an assault rifle. Christopher Roupe, seventten, was shot and killed after opening the door to a police officer. The officer, mistaking the Wii remote control in Roupe’s hand for a gun, shot him in the chest. Another police officer repeatedly shot seventy-year-old Bobby Canipe during a traffic stop. The cop saw the man reaching for his cane and, believing the cane to be a rifle, opened fire.

Stare at a police officer: Miami-Dade police slammed the fourteen-year-old Tremaine McMillian to the ground, putting him in a chokehold and handcuffing him after he allegedly gave them “dehumanizing stares” and walked away from them, which the officers found unacceptable.

Appear to be pro-gun, pro-freedom or anti-government: You might be a domestic terrorist in the eyes of the FBI (and its network of snitches) if you: express libertarian philosophies (statements, bumper stickers); exhibit Second Amendment-oriented views (NRA or gun club membership); read survivalist literature, including apocalyptic fictional books; show signs of self-sufficiency (stockpiling food, ammo, hand tools, medical supplies); fear an economic collapse; buy gold and barter items; subscribe to religious views concerning the book of Revelation; voice fears about Big Brother or big government; expound about constitutional rights and civil liberties; or believe in a New World Order conspiracy. This is all part of a larger trend in American governance whereby dissent is criminalized and pathologized, and dissenters are censored, silenced or declared unfit for society.

Attend a public school: Microcosms of the police state, America’s public schools contain almost every aspect of the militarized, intolerant, senseless, overcriminalized, legalistic, surveillance-riddled, totalitarian landscape that plagues those of us on the “outside”. From the moment a child enters one of the nation’s 98,000 public schools to the moment she graduates, she will be exposed to a steady diet of draconian zero tolerance policies that criminalize childish behavior, overreaching anti-bullying statutes that criminalize speech, school resource officers (police) tasked with disciplining and/or arresting so-called “disorderly” students, standardized testing that emphasizes rote answers over critical thinking, politically correct mindsets that teach young people to censor themselves and those around them, and extensive biometric and surveillance systems that, coupled with the rest, acclimate young people to a world in which they have no freedom of thought, speech or movement. Additionally, as part of the government’s so-called ongoing war on terror, the FBI – the nation’s de facto secret police force – is now recruiting students and teachers to spy on each other and report anyone who appears to have the potential to be “anti-government” or “extremist” as part of its “Don’t Be a Puppet” campaign.

Speak truth to power: Long before Chelsea Manning and Edward Snowden were being castigated for blowing the whistle on the government’s war crimes and the National Security Agency’s abuse of its surveillance powers, it was activists such as Martin Luther King Jr and John Lennon who were being singled out for daring to speak truth to power. These men and others like them had their phone calls monitored and data files collected on their activities and associations. For a little while, at least, they became enemy number one in the eyes of the US government.

There’s always a price to pay for standing up to the powers-that-be.

Yet as this list shows, you don’t even have to be a dissident to get flagged by the government for surveillance, censorship and detention.

All you really need to be is a citizen of the American police state.


The original version of this article, at the URL below, contains links to further information not included here.

‘Censored, Surveilled, Watch Listed and Jailed: The Absurdity of Being a Citizen in the American Police State’ by John W. Whitehead

Categories: Uncategorized

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